Brokering domain name agreements between buyers and sellers can be a challenging process at the best of times. There is no established process to determine the true market value of aftermarket domains and therefore we often rely on the good faith, and reason, of the buyer and seller to achieve a fair settlement.
We are lucky in Australia because the professional domain name sellers that we generally tend to deal with are straight shooters. There is a general agreement around what determines a premium domain name, often linked with its length, marketability and rememberability.
The overseas aftermarket (domain name) industry unfortunately attracts a lot of sharks. Some of the reasons there seems to be a disproportionate number of dodgy overseas domain name dealers is the ease of entry. There are no barriers to becoming a domainer, no qualifications required and the holding cost, and restrictions, of domain names like .com are pretty low.
If you have ever negotiated with an overseas domainer, it is likely you will come off second best in the transaction. This comes down to experience. Through years of buying and selling domains they:
- Are patient. They don’t rush deals and use time to their advantage;
- Know how to play the game. Domainers are cool and measured understand the transaction dynamics – namely, that the buyer is often emotionally invested in a domain name by the time they get to negotiation stage. They will use that to their advantage. They probably hear ‘this is my walk away price’ all of the time only to push buyers well beyond that.
- Aim high in every negotiation and
- Use strong arm tactics to maximise the profit opportunity, such as mysterious second buyers appear etc.
Warren Buffet quotes that you can’t do a good deal with a bad person and this is a maxim that rings very true in domain names.
When we come across a seller or a broker who we consider to be either unethical or who has a history of dodgy deals, we recommend that our clients pursue different domain name opportunities.
Some sellers will communicate a sell price well under the actual agreed price with the buyer, pocketing the difference and also charging the buyer broker fees.
There are situations where sellers or brokers set up dummy websites claiming that a domain name is ‘under construction’ to artificially inflate the domain name’s value.
They play negotiation games such as bating buyers with a low sell price only to pull it after agreeing to a deal and then ask for more $.
They set up fake profiles, pretend to be receiving multiple offers from interested parties, some will actively notify your competitors of your interest in their domain names while others will target your brand for cybersquatting (while you are negotiating).
Sometimes you just need to walk away
Often we advise our clients that sometimes it is best to walk away from domain name deals where sellers or brokers lack integrity. The risks associated with doing domain name deals with these kinds of people range from grossly overpaying to being the victims of an elaborate scam.
It is hard to tell a client to walk away from a domain name deal that they have become invested in but sometimes tough love is the best kind.
Brandsec is a corporate domain name management and brand protection company that look after many of Australia, New Zealand and Asia’s top publicly listed brands. We provide monitoring and enforcement services, DNS, SSL Management, domain name brokerage and dispute management and brand security consultation services.